49 – In house gyms (and recreational facilities and child care facilities)
Advisers who visited Dover’s Tulip Street office are often impressed by the in-house gym taking up the mezzanine floor in the rear building.
This gym started off as one stationery bike. It grew to include altitude training equipment, running machines, big screen television, sound system, Watt Bikes, rowing machines, high quality Pilates equipment and a full free weights system.
We have monitored its use and its used more than 50 hours by an average of between ten and fifteen staff every week.
The staff love their gym. It saves them an average of $1,500 a year in gym memberships, the equipment is better, there is no wasted travel time, there are no waiting lines and they can exercise any time they like including after hours and weekends.
Female staff can exercise in complete privacy.
We asked the staff what equipment they wanted and they got it.
Two older guys have each lost more than 20kgs. Perhaps they are still at work, producing, because of the gym. Perhaps they are still alive, breathing, because of the gym (that must be the ultimate tax free fringe benefit!).
Everyone has better health and better health means better work performance.
Ten staff each saving $1,500 a year adds up to $15,000 in non-deductible costs. It’s the same as earning more than $20,000 in pre-tax income. The equipment cost $40,000, and most of it was tax deductible under the accelerated depreciation claim rules.
That’s a return of more than 50% after tax on our collective investment.
The best bit is an in-house gym is an FBT free fringe benefit. It’s an in-house recreational facility and even the Pilates instructor engaged to show the staff the correct form for using the Pilates equipment is tax deductible and FBT free.
You can read the legislation regarding in house gyms here (s 47(2)).
All in all, an in-house gym is a great tax planning and staff relations initiative.
Let me know if you would like a guided tour!